Zenith hires turnaround specialist

Television Digest with Consumer Electronics, Jan 12, 1998

Robert Dangremond, principal in Jay Alix & Assoc. consultants retained by Zenith, will serve as interim CFO, replacing Roger Cregg, who resigned to take post at unnamed company. Dangremond's charge is to help Zenith turn profit, something it hasn't done for full-year since 1984, and line up additional financing.

Zenith has gained $80 million in financing in last several months, largely on backing of LG Electronics, which owns 55% of company. However, debt-rating agencies have downgraded Zenith's debt in recent weeks amid worries that S. Korea-based LG might not continue to baek U.S. partner. Zenith spokesman said LG continues to provide support and is "better positioned" than Korean competitors to weather current financial crisis.

Dangremond for last 3 years served as ehief executive of Forstmann & Co. and before that was CEO of graphics equipment maker AM International Inc. AM emerged from bankruptcy in 1993, has expanded since, but Zenith may be more challenging situation.

Despite embarking on turnaround plan in 1997 with new CEO Peter Willmott, Zenith piled up $143.7 million in losses in 9 months ended Sept. 30 (TVD Nov 3 p11) and struggled to complete renovations of Melrose Park, Ill., plant. Bad debt stemming' from 1995 agreement with Barley Partieipaoes caused problems ill assembly of 20-27[inches] TVs for sale in Brazil. Melrose Park problems are with new automated assembly lines, and plant has yet to hit full production of 15[inches] PC CRTs. TV segment also has opted to focus on 25-27[inches], dropping plans for 19[inches]. "We've made progress in both areas [TV and PC inonitors], but we're not out of the woods yet," Zenith spokesman said.

Zenith also continues search for successor to Willmott, who said in Sept. he will retire this whiter. Search for new chief exectuive, which is being headed by Willmott, has made "good progress," Zenith spokesman said, but he declined to speculate on when company will fill post.